ALOR STAR: The rise in minimum wage, while spelling joy for many, has not been good news for childcare centre operators.
While conceding that it is necessary to raise pay, childcare operators believe that the rising cost of living has forced many parents to reevaluate how much they are willing to spend on daycare fees.
Kedah Early Childhood Educators Association secretary Sharifah Maisarah Syed Mohamad said the government should review the childcare subsidy scheme to reflect the rising cost of living so that centre operators could comply with the RM1,500 minimum wage enforced since May.
"We wish to make it clear that our members support the new minimum wage implemented by the government.
"It is only fair for our employees to also enjoy the minimum wage like workers in the other sectors, especially with rising cost of living," she told the New Straits Times.
However, Maisarah said, some 100 registered private nursery, kindergarten and preschool operators in Kedah were in a bind.
"We are caught between complying with the ruling or risk losing our business if we impose a fee hike now.
"Most young parents out there are also facing hardships due to the rising cost of living," she said.
Maisarah said the only solution for operators to meet expenses was to hike their fees, but risked losing their business if the increase was too steep.
Childcare fees, she said, were a sensitive matter.
"If we suddenly increase the fees now, some parents may switch to cheaper alternatives by sending their children to unregistered nurseries and kindergartens," she said.
As responsible childcare centre operators, Maisarah said, the members were prioritising the interests of children and employees.
She said childcare fees in Kedah were already lower than the Klang Valley and other states.
"We already contribute to the Employees Provident Fund (EPF), Social Security Organisation (Perkeso), healthcare support, training fees for staff as well as pay income tax, licence and permit fees to the government and local councils," she said.
She said the minimum wage increase to RM1,500 meant childcare operators would have to pay each employee an additional RM300 and another RM200 for their EPF and Perkeso contributions.
"We cannot compete with the fees offered by unregistered childcare providers.
"They are not obliged to pay the minimum wage to their staff," said Maisarah.
She said registered nurseries also had to comply with the carer-to-child ratio set by the Social Welfare Department.
"One carer is allowed to manage only three children aged between 2 months and 3 years old.
"If we impose a RM350 monthly fee per child, we need to hire three teachers to look after nine babies, which generates RM3,150 in monthly revenue.
"Yet we have to spend RM1,700 monthly for each staff to cover their minimum pay and other benefits, which brings the total salary cost alone to RM5,100 per month.
"We haven't even included other fixed costs, such as rent and utilities," she said.
Maisarah said it was a challenging time for kindergarten and preschool operators as they had to also absorb the higher cost of essential items, which have gone up by nearly 25 per cent and 30 per cent.
"We can't compromise on the quality of the children's meals, so we have to absorb the higher cost of raw materials, such as rice, flour, cooking oil and other essential items."
Maisarah said some members were losing employees to workplaces that could offer the RM1,500 minimum wage.
"Some of them have five and even 10 years' experience in childcare. It is a regrettable loss, but we can't blame them because they also need to survive in this difficult time.
"But if we don't increase the fees, we will not be able to retain the staff for long. If more staff leave soon, some operators are at risk of shutting down their business," she said.
The association is appealing to the government to review the current childcare subsidy scheme paid to the parents.
The government provides
civil servants earning less than RM5,000 a month a subsidy of RM180 for each child below 4 years old sent to a nursery operated at their workplace or community facility.
The subsidy is also provided to parents working in the public and private sectors who send children to private nurseries registered with the authorities.
Urban households with a per capita monthly income (which is the total income of all members divided by number of members) of below RM800 and rural households with per capita income of below RM500 are eligible for the subsidy.
"However, parents with a combined monthly income of RM3,000 with three young children in urban areas are not entitled to the subsidy at any registered private nursery.
"A single mother with one child living in a rural area, who earns RM1,500 monthly is also not entitled to the subsidy. However, a single mother with one child living in an urban area is entitled to the subsidy," Maisarah said.
She said the association was urging the authorities to review the subsidy scheme to reflect the rising cost of living and expand it to benefit more parents.
The last time the subsidy scheme was reviewed was in 2014.
"We are making this appeal so that more parents may protect the safety and welfare of their young children by sending them to registered nurseries.
"At the same time, we will be able to do justice to childcare workers by paying them the minimum wage.
"This is crucial for the sustainability of early childhood care and education. Otherwise, working parents may have to send their children to unqualified people, which may put them at risk."